Category Archives: Labour’s future

At the last election, England decisively shifted blue. Now Labour now needs a plan for a red shift.

We believe progressive parties win when we own the future.But too many people think we belonged to the past. The electorate is changing rapidly. The world of work is dramatically altered. Communities are changing shape. Generational shifts in values are under way. Many feel left behind. Yet vast new forces of trade and technology are speeding up.

So we need to go back to basics. To draw on the real experience and insights of English people today, inside and outside the workplace. To show how we can re-energise the ways Labour values can transform real lives.

Red Shift brings together a group of English Labour MP’s and activists determined to shine a spotlight on how England is changing, how peoples’ ambitions are changing – and how Labour needs to change to win.

The group will publish its first report – Looking for a New England – on the changing world of work and politics at party conference in September.

In just a couple of months’ time we will be casting our votes for the next Leader and Deputy Leader of the Labour Party.

Before voting opens, our Leadership and Deputy Leadership candidates are being put to the test in a series of hustings events being held across the country. This Saturday (27th June) the hustings are coming to Birmingham.

This is your chance to put your questions to the candidates and hear them make their case for why they want to lead our party. Everyone is welcome, so feel free to bring friends along – they don’t need to be a Labour member to come.

Places are going fast but you can always put your name down for the reserve list – reserve your seat here.

If you could help out being a steward or signing people in I know the Regional Office would love to hear from you; contact Douglas Bridger on:douglas_bridger@labour.org.ukor 0121 569 1908

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I have already decided who I am backing…

I’ve given my support to Yvette Cooper for Leader and Tom Watson for Deputy Leader.

I am backing Yvette because she has a clear vision for a new Britain – one where everyone can succeed. She has proved again and again that she is the right woman for the job. I believe she is the leader we need; she has experience both in Government and out, she understands that if we are to win we must reach out to Tory voters, and I believe, she stands the best chance of being our next Prime Minister and leading a Labour Government.

I am backing Tom because he will rebuild our party from the grassroots up. We’ve suffered a defeat and Tom is the man to help us get back on our feet, he is a formidable campaigner and will help us connect with millions of new voters. I saw his legendary organising skills first hand when he helped run my by-election campaign to become Hodge Hill’s MP in 2004.

We need to hear your voice too – I look forward to seeing you on Saturday!
With all best wishes

It was the election that ended one of the oldest myths in progressive politics.

Depressed by decades of Tory dominance, Labour’s 20th century thinkers thought they knew the answer. Reunite the centre left, bring together Labour and Lib Dem visions, voters and voices, and hey presto a new ‘progressive majority’ would be born.

Well now we know the truth. In 2015, the Lib Dems collapsed to the status of a fringe party. And who prospered? Not Labour. But UKIP, the SNP and ultimately the Tories. The jury is in and the verdict is simple. You can’t build a radical centre in British politics around some mythical ‘progressive alliance’ of Lib Dems and Labour. Because it doesn’t exist.

Let me confess I find this a painful conclusion. The notion of the ‘progressive alliance’ has a long and distinguished history on the left. And few were better makers of the case than my predecessor in Stechford, Roy Jenkins. Urged on by Roy, Tony Blair and Paddy Ashdown chewed the fat for years fathoming what might be possible.

But, as Churchill once said; however elegant the strategy it is wise to occasionally look at the results. And the results of the 2015 election are very clear.

Amongst Labour’s target seats, victories were few and far between. The 22 seats we did win - like Cambridge, Lancaster, Bradford or Dewsbury – were by and large alike: they were either home to large numbers of ethnic minority voters or what marketeers call ‘urban intellectuals’ – university educated, middle class, and quite possibly enjoyers of the Guardian.

But let’s look at the target seats we lost to the Tories. There were 74 of them in England and Wales. Here the Lib Dem vote collapsed as we knew it would. But Labour’s disastrous ’35% strategy’ – aka ‘a Hail Mary pass’ – aimed to mobilise a risky, narrow core vote plus a few and had assumed one in three grumpy Lib Dems would come our way. So what happened? Nothing of the sort.

In the target seats we lost to the Tories, the Lib Dem vote collapsed by an average of 6,585 – but more than two thirds sailed right past us and went to UKIP; their vote rising by an average of 4,853. The remaining Lib Dem losses split between Tory and Labour – and the Tories took the bigger slice. We won on average just one in 13 of the fleeing Lib Dem voters. So much for the progressive alliance. Worse, in 33 of the target seats we lost, not only did the Lib Dem vote fall – but the Labour vote fell as well. The Lib Dems quite simply were not and are not a reservoir of closet lefties.

What are the conclusions for people like me who want to rebuild and dominate the radical centre in British politics?

I think three basic ideas stand out.

Number one. There is no substitute to building a bigger stake in what Keith Joseph once called the ‘common ground’ of politics. This isn’t some kind of triangulated, dead centre split-the-difference position between Tories and Labour. As Keith Joseph explained; ‘the middle ground is a compromise between politicians unrelated to the aspirations of the people, the common ground is common ground with people and their aspirations.’ We need to own the common ground – not triangulate with the Tories.

Second, we have got to renew our radical roots and win back support from the radically minded, often collectivist, anti-establishment voters who today see UKIP, the SNP and the Greens as a better home than Labour. They should be ‘our voters’. And unless we make it so, we’ll be in opposition for ever.

This means we need not Blue Labour, but ‘blue collar Labour’. Blue collar workers dominate the seats where both the Lib Dem and Labour vote fell – seats like Burton, Nuneaton, Dover, and Harlow, where I grew up and started my working life in McDonalds, later spending a happy summer as a white van driver. Labour’s share of the skilled working class – once 50% back in 1997 – is now down to just 32%. It barely improved on our disastrous 2010 performance. This is why the Tories blue collar Conservatism is such a smart move. Yvette Cooper is right when she says: we have to win back the towns once again.

To this we need to add ‘Green Labour’, because in 43 of our target seats the Green vote went up by more than the Labour vote. I spent most of the campaign on the road with the Labour Students minibus. Our amazing younger activists were very blunt with me: if we want to own the future we have to become far greener in policy and character.

Third, we have to be the party of older voters and not just the young. I’ll put this as gently as I can: Labour is facing a demographic time-bomb unless we transform our standing with older voters.

We had a brilliant offer for young people at this election. Our Youth Manifesto, co-written by young people, was magnificent. At its centre was our most expensive £3 billion pledge: to cut tuition fees and raise grants. But we had little to offer the over 65s – and what happened? The Tory majority amongst over 65s soared to almost 2 million votes – more than the overall Tory Majority.

We had almost nothing to say to older voters beyond our warnings about the imminent collapse of the NHS. Meanwhile the Tories hammered away about stability, Ed Miliband, the triple lock on pensions and access to pension piggy-banks that sounded like free gold for a golden retirement.

We must never again fail to be the party that speaks for older Britain. And the conclusion for our leadership debate is quite simple. If the next Labour leader does not connect with older people – especially older women – then quite simply we will lose again. Remember at the next election there will be 1.5 MILLION more voters over 65 as the baby boomers retire – and 40% of voters will be over 50.

If there’s one thing I learned from my political hero Tony Blair, it’s that when modernisers stop modernising we fail. We have a mountain to climb to win back power. But Labour’s history tells us that we’re great mountain climbers when we dare to face facts, grasp nettles – and change. Today, trade, technology, the world of work, and demographics are completely re-shaping the radical centre of British politics. The coalition we need to win back is now clear.

This morning I spoke to a wide range of business leaders about how Labour’s science policy can help create the jobs of the future. It was an opportunity for Labour to set out its strong commitment to an ambitious plan for research and innovation. It was also a chance to hear from the science community about how to take this conversation forward.

We talked about how Labour’s approach to science and innovation are central to our priorities: skills, regional growth and the NHS. I was also able to share the key insights from the responses we’ve already had to Labour’s Science Green Paper, ‘Agenda 2030: One Nation Labour’s plan for Science’ which I published over the summer. The paper can be found here.

Labour will continue to listen to businesses and experts as we further develop our policy for science and innovation. Our goal is clear: to build an opportunity economy with high skilled jobs and wages to match.

In it I set out options for reform of Britain’s universities to boost the country’s knowledge economy and open high paying technical and professional jobs to the ‘forgotten 50 per cent’.

These options draw together hundreds of conversations that I have had with university and college leaders, academics and students over the last six months in Britain, Europe, India and China.

Invoking the ‘white heat’ message of Harold Wilson’s government, elected 50 years ago this year, I argue that reformed universities are now key to fostering more high paid jobs in the ‘light speed’ global digital economy.

The following are the ‘big five’ ideas which university and college leaders, students, teachers and researchers want to hear debated:

1. ‘Technical Universities’, a collaboration of employers, major university science and engineering departments and colleges, offering students the chance to study a new ‘earn while you learn’ ‘Technical Degree’

2. A revolution in links between colleges and universities based on the US-style community college movement.

3. Reform of research funding to support British universities in creating global ‘Star Alliances’ of the world’s best scientists with longer term research support.

4. A big increase in university enterprise zones to better link universities to regional growth.

5. A new revolution in access to higher education, with a new national advice service to support young people into higher academic and technical education, support for university-school trusts, an expansion of the Open University’s Massive Open Online Courses and a new partnership between the Workers’ Education Association and UnionLearn.

I would love to hear your reflections on the pamphlet so please do get in touch.

The consultation on our recently published green paper on science continues. Yesterday it was great to see Scientists for Labour publish their response ‘Policy Plan’ which can be read here. The publication is accompanied by a piece in Progress Online by Mike Galsworthy of SfL which can read here.

The consultation on One Nation Labour’s plan for science, which can be read here, is open until 1 August and throughout this consultation Labour will be listening to researchers, businesses and voices across the science community. I look forward to reading more fascinating responses such as this one.

If you would like to feed in to Labour’s science policy please send your views on the Green Paper to Charlie.samuda@parliament.uk by 1st August

British business has had to sponsor over 282,000 skilled people into Britain – that’s the same size of Newcastle – because they couldn’t find the skills here.

But look at the future and the skills crisis looms larger still.

In the UK, between 2012 and 2022, it is projected that we’ll need:

Over a million more people in professional occupations

Nearly 600,000 new managers, directors & senior officials

The Royal Society of Engineering tells us that we’re delivering 36,000 too few engineering graduates every year.

Mike Wright says that the country’s automotive and aerospace industries will suffer if there isn’t a greater focus on improving the level of domestic engineering skills in the

future

Andrew Adonis describes the skills shortage as the “single most important impediment” to British businesses

How many more times do we need to hear it?

The tragedy is that great firms want to bring back work to Britain.

I can understand why.

When I left Business School in America, there was only one place I’d consider to build any business.

Here is Britain.

It’s one of the best places in the world to build a business.

And lots of people want to do more.

In fact, PWC says that ‘re-shoring’ could create 100-200,000 extra jobs over the next decade, adding £6-12billion onto GDP.

What’s standing in the way?

A lack of skills.

This is what KPMG said is stopping too many jobs coming here.

And here’s the tragedy for workers.

Extra skill means extra pay.

Analysis for BIS shows the difference in earnings between a high quality level three apprenticeship and a GCSEs, is £117,000 over a lifetime.

But for most it’s a degree that’s the key to a middle-class life.

Economists may disagree on what technically constitutes ‘middle-class’, but the marketeers tell us it’s the difference between earning £37,000 and £47,000 a year.

That’s the kind of earning power a degree level qualification gives you.

On average, degree holders earn more than £100,000 more than someone with only two A-Levels.

Shifting more people into ‘top gear’ with a degree is one of the best things we can do to earn our way out of this cost-of-living-crisis.

But, right now it’s too hard for students to shift into ‘top gear’

There’s the traditional degree route which is well-established and open to half of our young people, thanks to changes that Labour made in office.

But what about everyone else?

More and more want an earn-while-you-learn route into higher-level skills.

Yet look at the figures: the number of under-25s starting on an apprenticeship isn’t rising, it’s falling under this Government.

In the last year alone, we’ve seen 11,400 fewer young people starting an apprenticeship.

That’s why Ed Miliband has made it a central mission to change the future for the forgotten 50% who today do not have a good enough or clear enough choice of high

quality vocational education.

They do not have enough apprenticeships and there’s no real vocational route to degree level technical and professional qualifications.

Right now a vocational route to higher-level skills is like navigating rapids: risky, a bit haphazard with a high risk of drowning.

First up, it’s very hard to get your foot on the ladder.

Last year, there were 11 applications for every apprenticeship vacancy.

That means it’s now twice as hard to get on an apprenticeship as it is getting into University.

High-quality apprenticeships, where firms are prepared to sponsor you to degree level skills are even harder to win.

It’s almost three times more difficult to enrol on a Rolls Royce apprenticeship than going to Oxford.

For BAE it’s 2.5 times harder than getting into Cambridge

So we have frustrated companies and we have frustrated workers

We need a new way forward.

A path that’s pro-company and pro-worker.

So today I want to out some principles for change.

First we have to accept the big, bold principle of devolution for skills that Andrew Adonis has set out.

Today I want to say more about how that might work in practice, and as I do I want to say a huge thank you to my advisory group, co-chaired by the Rt Hon Stephen Timms, Rushanara Ali, and advised by, amongst others, Cllr Keith Wakefield, Leader of Leeds and Cllr Sue Murphy, Deputy Leader of Manchester City Council.

Let me say at the outset that as we give employers and LEPs and Combined Local Authorities more say over how skills funding is spent, no-one is advocating for the proliferation of funding agencies, handling cash or contracts or countering fraud.

Second: We think the role of employer-led sector bodies, built on reformed SSCs and their industrial partnerships, are critical to fostering a ‘something-for-something’ deal with big employers and their supply chains to drive up apprenticeship numbers.

So we’ll give employers, working collectively through reformed sector bodies, more control over the standards and assessment criteria for training in their sectors, and enable them to broker a significant share of the £1.4bn apprenticeship budget to address their skills needs.

In return, we will ask them to work to drive up the number of high quality apprenticeships in their sectors and supply chains – and we’ll use the power of public procurement to help.

Large firms will need more apprenticeship to win big government contracts. Full stop.

Third: Combined Local Authorities and Local Enterprise Partnerships should shape the broad goals for adult skills in their neck of the woods.

To win this freedom, these authorities will have to show us that they are up to the job and Andrew Adonis has set out some tests for quality governance.

But I think these broad plans will have some important things in common.

First, they should include what Lord Adonis calls Business Hubs – and what I’ve described in this post as City Apprenticeship Agencies.

One stop shops that provide information and advice in particular to small and medium businesses with a real focus on support for apprenticeship recruitment.

It’s a model like we’ve seen in Leeds – a solution that’s seen apprenticeship numbers doubling in the city.

In an age where SMEs are creating jobs five times faster than big business, we need solutions that works for all firms, regardless of their size.

So in the future, if I run an SME in Birmingham I will have on my doorstep, a hub that can offer me advice on how to set up a high quality apprenticeship with a choice of apprenticeship arrangements: some put in place by sectors nationally; or as a service delivered locally.

Second, we want LEPs and combined local authorities (CLA) to shape some goals for the adults’ skills in their area.

Back in December 2006, Sandy Leitch set down an important principle: “The skills system must meet the needs of individuals and employers. Vocational-skills must be demand-led rather than centrally planned”

This is an important principle.

But for the £2.4bn 19+ Adult Skills budget we need to bring a better balance to the ambitions of learners on the one hand, and the ambitions of business to employ them.

So: we desperately need better information and guidance so ‘demand’ is better informed.

We need a different relationship with DWP, as you see work so well in Germany, where students are far better informed about the local world of of opportunity.

But I think we also need LEPs/CLAs and providers together to forge the kind of ‘Outcome Agreements’ that are tried and tested in Scotland and over the medium term, aim to eliminate the skills gaps in a demand-led system.

Third, I think there is a need for the CLAs/LEPs to directly commission what you might call a strategic core of skills, where serious local skills gaps have been identified.

This flexibility is absolutely critical in a world where we envisage Combined Local Authorities and LEPs are taking a much bigger role in co-commissioning Work Programme contracts.

This will – for the first time ever – ensure that skills provision meets the needs of local areas, balancing social and economic demands with identified areas for growth.

Many parts of Britain, including my own constituency, have very high-levels of unemployment alongside firms crying out for skills.

Mike Wright of JLR has spoken about JLR’s challenges.

Yet on the south side of the M6, half a mile from the Castle Bromwich gates is my constituency with the highest youth unemployment in Britain. The balance between the ‘commissioned core’ and the ‘market margin’ will obviously look different in different places.
Giving local areas the flexibility and freedom to commission against local labour market priorities will help us join up the skills system and the welfare to work system for the first time.

Naturally, there is still a great deal for us to work through, and I look forward to those discussions ahead.

Already clear is that two funding systems, split between the adult and young people’s skills budget, is a complex set-up.

So we’ll want your advice on whether to move post-19 funding to a per-student, not per-qualification basis, as works for under-19s and in Scotland.

The changes we propose offer the chance of a creating a far stronger ‘triple track’ for skills, for young and old alike.

Some will want to take the well-established academic route from A-Levels through to University

Others will want to progress through the vocational track, with opportunities to move through colleges specialising in delivering technical and provisional skills, on courses better aligned to the needs of local employers.

And we hope many more will secure high-quality apprenticeships with high-quality training ahead.

But every track will need to offer something more.

A surer route to higher-level skills.

Back in 2006, Sandy Leitch advised an increased focus on L5 and above skills.

Yet today it’s incredibly difficult to take an apprenticeship or college route to degree level professional and technical skills.

Just 2% of apprentices are given the chance to study to degree level each year.

None of our competitors are making the same mistakes.

Back at the end of the 19th Century, the huge explosion of our university system was in part driven by the need to equip a new generation of businesses and a new generation of workers with the skills to shift into ‘top gear’ with the qualifications that can unlock a middle class life.

Beginning with the creation of my alma mater, Owens Colleges, Manchester in 1851, eleven universities were opened over the course of fifty years with a clear empathy for the German model, pioneered by the University of Berlin in 1810, and what Rev. J Percival described as:

“Teaching [the people] things which would help them in their occupations”

In the years that followed, science and engineering expanded whilst classics declined until finally under the pressure of World War One, a modern relationship was finally forged between government, academia and business.

This was a spirit and a purpose which Harold Wilson rediscovered in his famous ‘white heat’ speech.

Before the 1964 election, Labour’s Higher Education Study group concluded:

‘Economic expansion is only possible if university and technological education expands rapidly and continuously to provide the necessary brain power and skill’.

This was the analysis that inspired the great explosion of Polytechnics.

Today, we want colleges, universities and business to come together in a new alliance as they did in the 1960s.

Not in two different worlds. But in one, world-class system.

We want to open many routes – not just one road – to a degree and the better life degree level skills can open.

When we were last in office, we began the job of reform.

Bill Rammell gave colleges the right to apply for powers to award foundation degrees.

John Denham pioneered the Workforce Development Programme.

But the truth is today there are many rocks in the path of building the vocational path to degree level professional and technical skills.

Over the months ahead, we want your advice on turning this ambition into action.

Every so often in British politics, we arrive at this point where we see the skills challenge in a stark and profound way.

Back in 1944, Lord Percy, Rector of the Newcastle Division of Durham University put it like this: ‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’

I wanted to let you know about the Royal Society’s excellent Vision report for science and mathematics education. You can access the full pdf copy here.

Published on Thursday, just two days after our science green paper, this is an insightful reminder of the kind of ‘supply line’ of science which our country needs if we’re to see science and innovation-based growth.

Just like our science green paper (which you can read here) this report sets out a number of concerns that the Royal Society has about the state of science in our country. Research for the report highlights some of these concerns. For example; in 2011 57% of university science staff reported that practical skills of new undergraduates had declined in the previous five years and just 13% of young people in the UK study mathematics beyond the age of 16.

Great Britain has a glorious scientific history. Many of the scientific discoveries and innovations that have shaped our modern world were made here in the UK. But this status as a world-class player in science and research is now under threat.

As Sir Paul Nurse sets out in his introduction; if we are to continue shaping the world in the centuries to come we need a plan for science and maths education which can; “…enable people to make informed choices, empower them to shape scientific and technological developments, and equip them to work in an advanced economy.”

I am pleased to say that the Labour Party is already committed to maths education until 18 and I am sure we will be looking very closely at some of the other recommendations that this report makes.

I met with Prof Jim Al-Khalili, one of the board members behind this fantastic report, earlier this week. We discussed the report as well as our science green paper; ‘Agenda 2030: One Nation Labour’s Plan for Science.’

Speech to [Parliamentary Links Day], House of Commons, London. Tuesday, 24th June 2014

Check against delivery

Chairman

It is a tremendous honour to help mark the greatest day of the year for science in parliament.

I want to pay an enormous tribute to Dr Stephen Benn and the Society of Biology for helping bring the day together.

I want to commend you all for the way so many people and so many organisations have come together from across the worlds of science and engineering to talk, debate, speculate and lobby and leave us here in parliament with fresh impressions, fresh analysis and fresh evidence of how important both science and engineering are to the future of our world.

I want to thank you above all for the inspiration of your example.

I count myself as very lucky to have known an extraordinary scientist from a very young age.

She was a biologist and a teacher and a head of science at comprehensive schools including my own.

She was someone who inspired in me a lifelong wonder for science, a curiosity, and an admiration.

Ruth Byrne was not only my teacher, she was my mother.

And when she died at the age of 52 from cancer of the pancreas, she left me not only with a sense of scientific possibility but a sense of how much work still lies ahead.

Science and Parliament

Your theme this year is about Parliamentary links to Science and Engineering. I want to offer you a view about how we cement science and engineering centre-stage in the run-up to the General Election. As we are in Parliament I thought it would be apposite to reflect on the way science and engineering, industry and politics come together today and the relationship that lies ahead.

Around 300 years ago, a very great writer left London on his travels around the country to write a book, which is today one of our finest records of Britain on the eve of the industrial Revolution.

Daniel Defoe’s ‘A plan of the English commerce, being a complete prospect of the trade of this nation’ paints a portrait of a country amidst tremendous change.

‘The most flourishing and opulent country in the world,’ he called it and the cause he said was clear; ‘Trade’ and its two daughters, ‘Manufacture and Navigation’

Defoe suspected that for all the advance he saw, something bigger was coming.

And he was right.

By the time ’A Plan’ was published in 1728, the Royal Society, founded in Gresham College, was 50 years old. Sir Isaac Newton, its great master, had died the year before and in Birmingham, one of founders of the industrial revolution, Matthew Boulton was born.

Over the next six decades, Boulton, together with his friends in the Lunar Society in a story wonderfully told by Jenny Uglow, took the traditions and methods of those great founders of the Royal Society and fused them to industrial method, helping trigger the industrial revolution.

A nation of explorers and traders quickly became a nation of inventors and industrialists. The worlds of science and industry were irrevocably connected.

Back in the early days of the Enlightenment, the French writer Diderot had observed that uniquely in Britain:

‘philosophers are honoured, respected; they rise to public offices, they are buried with kings’.

Well, it wasn’t long before we were putting great inventors and industrialists like James Watt alongside our philosophers and our kings.

But it was to take another century before science and industry were really fused with the dirty and difficult business of politics.

From the 1850s and 1890s, concern with the state of our science base, and the state of our schools gathered pace until under the burning pressure of world war one a real partnership came together;

- The Department of Scientific and Industrial Research was founded in 1915.

- Universities came to play a mission critical role in the work effort and crucially a new alliance between science, industry and government was hard-wired together.

And we’ve been trying to get the relationship right ever since.

Now that alliance has never been more important.

The scale of the problems, which I realise are merely solutions in disguise and which we are tackling today, are simply too big for one scientist, one university, one company, or one government to tackle alone.

The new partnerships that you see in such spectacular collaborations like the Gaia One Billion Star Surveyor, or the Hadron Collider are gigantic incarnations of the same ethos and approach that drove the Lunar Society, but they are global in scale.

These journeys of curiosity, exploring the endless frontier, are rightly your principal concern.

But there is a second reason the alliance is so vital.

Your country needs you.

Searching for some inspiring words for today’s speech, I stumbled across these in the House of Commons library last week;

‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’

Those were the words of Lord Percy, Rector of the Newcastle Division of Durham University, reporting to the government in 1944.

They could have been written last week.

Two years later, Lord Barlow agreed;

‘If we are to maintain our position in the world and restore and improve our standard of living’ he wrote ‘we have no alternative but to strive for that scientific achievement without which our trade will wither’.

What was true back in 1945 is true again today.

The Challenge Today

Our old enemy, ‘British disease’ is back with a vengeance.

That traditional crisis, of extremely low productivity while other nations streak ahead, now scars the recovery and haunts industry, making it even harder to escape today’s cost-of-living crisis.

Producing more with less, as every business owner knows, is the key to doing well and the fastest way to give your workers a pay rise.

But look at the figures today.

Since the last election, output for every hour worked has not gone up; it’s actually gone down. Equally, output per worker has not gone up. It’s gone down.We’re actually less productive than we were four years ago.

This appalling record is far worse than the last years of the 1970s, long deemed the moment when ‘British disease’ reached its peak but a period when output per worker, and output per hour worked actually rose by over 5%.

Worse, we’re now falling rapidly behind our competitors. The gap in productivity per hour between the UK economy and G7 average is now 21 per cent – the widest gap there has been since 1992.

This is absolutely fatal for any escape from the cost of living crisis. If companies can’t produce more then it’s not easy for firms to give their staff a pay rise.

As someone who started work behind a fry station in McDonalds, I know that any job is better than no job.

But I also know that a good job is better than a bad one and right now we’re simply not producing enough good jobs.

Today, the average full-time worker has to work an extra one hour and 52 minutes a week in 2013 to earn what they earned in real terms in 2010.

Look at our ‘knowledge economy’ and it becomes clear what is going wrong.

Economists and scientists now know[1] that science and research is the key to growing productivity.

In the US, the authors of the Gathering Storm remind us that 85% of growth in wealth per capita is driven by innovation[2].

The knowledge economy is the powerhouse of productivity growth, creating better jobs with better wages.

Yet, with the honourable exception of automotive and aerospace, which Labour did so much to save during the global crash, the story isn’t good.

Getting innovation policy right is not actually rocket science. It is about people, ideas and money. You need great people, great institutions and strategic investment.

Yet, look at what is happening in the UK.

In 2012, the last year data is available, UK investment in R&D by government and business together has fallen by nearly £1 billion – (£923M) – the largest annual fall since consistent records began in the mid-1980s.

Amongst advanced Western nations, Britain now ranks 23rd out of 33 in the league table of R&D spenders.

In our most important research industry – pharmaceuticals – which accounts for a quarter of all UK R&D spending, research budgets have fallen by a huge £467 million since 2010, that’s a 10% fall.

In telecoms, one of our other leading R&D sectors, budgets have fallen by 20% – that’s £240M.

Look at our great institutions.

In our universities, the great epicentres of science and knowledge, we have the world’s best thinkers.

But their labs and classrooms now rest on a mountain of debt. University borrowing will reach £7.3bn worth of debt by 2015, an increase of £1.8 billion from 2012. That’s £45.6 million for every university in the UK.

Vice-chancellors tell me that falling research budgets now mean that the brain drain has been gathering pace for at least the last 18 months.

And that’s nothing when we consider the black hole that’s been created in the finances of the Department for Business, Innovation and Skills by the Government’s unsustainable funding system.

The Public Accounts Committee now estimates that at current rates, students will be borrowing nearly £200 billion over the next twenty years to fund their studies and 45 per cent of this will be written off. It’s universities and our researchers of the future who will be paying the price.

And let’s not forget that other great institution that is important here.

The European Union.

European policy makers now understand that innovation is the only way out of austerity.

And the creation of the Horizon 2020 programme is proving crucial for the strength of British science, as UK universities, research centres and businesses can expect to receive £2bn in the first two years of the new funding round.

Leaving the EU, as some propose, would be absolutely catastrophic for science funding.

Third we must address human capital. The skills gap across the country grows worse. A fortnight ago, KPMG reported that skills shortages are bringing to a halt the plans of manufacturing firms to ‘re-shore’ work.

Since 2010, the number of people working in ‘Scientific research and development’ has fallen by over 12,000.

The Migration Advisory Committee has now added 117 high skilled roles to the shortage occupation list, which employers can fast track onto visas, because there are not enough skills in Britain.

The Royal Academy of Engineering estimates that we’re currently 36,000 short and at the rate we’re going there will still be big gaps to fill.

In our schools, Michael Gove’s disastrous School Direct scheme for teacher training has produced a huge shortage of physics teachers.

Half of state schools now send not one girl to do A Level physics.

Practical experiments have been taken out of the exam curriculum. The careers service has been destroyed. Apprenticeships for the under 24s are actually falling.

We cannot go on like this.

That’s why today I am pleased to be launching our green paper on science and innovation.

Our message is simple.

We need to strengthen British science – because British science will strengthen Britain.

We want to start a big debate on how business and government come together to grow the strength of science.

We want to work with the science and engineering community, in all parts of Britain to get the answers right.

We want to work across parties – because wherever we can maximise cross-party consensus we will.

We know that predictability and certainty are important; that they help make your work easier.

We want a new culture of science and evidence in public policy.

We want stronger universities with a bigger share of global science budgets and a bigger role in their regional economies.

And crucially we want to strengthen every rung on the ladder up into a science and engineering career for our young people.

Conclusion

As NESTA argued two weeks ago, the debate around science and engineering is seen by the public as vitally important.

In part, that’s because the public knows science, engineering and the business of innovation is key to the development of new cures for diseases, earlier diagnosis, greener, cheaper energy and crucially the jobs of the future.

The public knows that if we are not the pioneers then others will be.

If we don’t develop the jobs of the future, then others will.

And that will irreparably damage the opportunities of our children and our grand-children.

After all they are the very people for whom we want better chances than the chances that we enjoyed.

[2] [2] http://www.nap.edu/openbook.php?record_id=11463&page=1. The 85% refers to the work of Robert Solow and Moses Abramovitz published in the middle 1950s demonstrated that as much as 85% of measured growth in US income per capita during the 1890-1950 period could not be explained by increases in the capital stock or other measurable inputs. The unexplained portion, referred to alternatively as the “residual” or “the measure of ignorance,” has been widely attributed to the effects of technological change